Week Ten | Personal Selling | August 30th – September 5th
Bhargav Choudary Alaparthi
Date: September 5, 2021
Marketing Strategies – 202146 – CRN105
Professor: Wayne Clark
You are provided with a scenario below. As a group make a recommendation for the best approach for sales compensation plan based on what little information has been provided:
Scenario #1: In the midst of the pandemic you work for a restaurant in New York City who is trying to keep their doors open. Currently there is only curbside pickup available. You need to increase the number of pickup orders and you challenge the staff to come up with ideas and incentives to do so. What is their plan?
Scenario #2: The restrictions are being lifted and you now can have a dining room at 50% capacity. The community is still reluctant to return to restaurant dining. You need to have both pickup orders and book the in restaurant service to capacity to meet your minimum margins. You challenge your staff to come up with ideas and incentives to do so. What is their plan?
Scenario #1 (Jorge)
Sales incentives are the key to moving big volumes of products and services offered in any industry driving positive growth for a company. While marketing focuses on the macro part of establishing a brand reputation and reaching and identifying the target audience it is the sales team who’s in charge of closing those sales personally. This is why it is imperative for any type of company to establish an appropriate incentive package for those who participate in them. “A successful compensation system effectively motivates the sales force so that an organization can synchronize its salespeople’s activity (i.e., sales effort) with its objective(s). The success of the system likely hinges on how appropriately it recognizes and rewards each salesperson’s effort.” (Chung et al., 2020, p. 2)
In 2020 the hospitality group I work for (the largest in the New England region) faced this exact . All our nightclubs were closed and our restaurants were operating through delivery only. One of the creative solutions the owners thought was to get people to deliver in their own neighborhoods. People (currently in furlough or working part time) would get paid food bags just for posting on their Facebook Neighborhood Groups. Furthermore, whoever was able to close 4 sales on a single day would bring a nice (and pricy) meal from one of our restaurants to their house. We were all on-board and happily acted as ambassadors for our beloved workplace. The key component here was that everyone was reaching people they knew to some extent, direct contacts and friends of friends from all the suburbs around Boston. It was a massive success. On top of food rewards and the obvious choice of monetary compensation, companies in a similar situation could offer a wide array of incentives. According to Peter and Donelly the most common types of non-monetary incentives are: “Pay for new product ideas, education allowance, Time off, fringe benefits, stock options, retirement plan, profit sharing”. (Peter & Donnelly, 2019, p. 153).
There are, however, many other creative incentives owners and managers could implement to boost restaurant sales in this very restrictive environment. Some companies offer big company-wide trips or parties when a sales team meets a quota. Cruises to the Bahamas used to be a widely used incentive in the 90s. In this case, due to the COVID-19 restrictions it would be necessary to come up with other types of activities that respect social distancing. Sending a TV or Nintendo Switch to the best seller of the month could be a great idea. Enrolling everyone involved in a crypo-currency training workshop or a wellness/meditation course are two activities that were in high demand the year of the pandemic.
Scenario #2 (Nneka & Bhargav)
Incentives are commonly used by businesses to give their employees something in return for doing a particular goal oriented work (Ciopryna, 2018). In this case the specific goal is to have both pickup orders, as well as to book the in restaurant service to capacity in order to meet our minimum margins. A critical part of a sales manager’s job is “motivating and compensating the sales force. These two tasks are major determinants of sales force productivity” (Peter & Donnelly, 2019 p. 153). Part of the first step we will take to try and challenge our employees to come up with innovative ideas, is to get them to use different techniques for brainstorming like mind-mapping, and to emphasize the importance of working in a team and individually. This will enable them to come up with innovative ideas to contribute, and bounce off the ideas of each other to create a stronger thought pattern (Bienvenu, 2018). This way we can encourage our employees to be creative and take risks, as well as show them our commitment as a business to encouraging a growth mindset. As restrictions are now being lifted on businesses and restaurants, it will be critical for us to proactively create a reopening playbook. This playbook will be made up of our updated standard operating procedures that not only provide safe environments for our customers and employees, but one that also reassures potentially anxious customers (Haas et al, 2020). In addition to updating our operating procedures, we will also work to adjust our menus to address the shift in our customer habits and preferences, as well as enhancing our daily delivery capabilities (Haas et al, 2020). This will potentially help reactivate our customers and bring them back into our dining rooms.
Part of our restaurant’s operating procedures will also include new hygiene and safety protocols that will be visible throughout the restaurant. We will also ensure that we align with the changes in customer behavior, and adjust processes to increase labor efficiency by bringing back some of our furloughed employees — in a way that aligns with our customers’ needs (Haas et al, 2020). We will also try partnering with other companies to share labor, and use various talent-exchange programs. Part of the way we can attract customers to come back to in-person dining is by tailoring our approach to each of our customer segments, by starting with our loyal guests, first-time customers during the pandemic, customers who spent their money at other places, and potential customers (Haas et al, 2020). Some of the ways we will try attracting our loyal customers/guests is by sending them personalized messages that contain crucial information regarding when our restaurant is open, and why they should feel confident and safe to return to in-person dining (Haas et al, 2020). As a business we also recognize the changes in our customers’ behavior, which is why we understand that during the pandemic some of our customers may have preferred to spend their money elsewhere, or preferred to make home cooked meals — this is another segment of people we will market to, in order to gain their attention again. Having price promotions and offers that feature the most popular items on our menu, and personalized favorites could be a good way to win them back (Bienvenu, 2018). As a restaurant we will also work to retain the customers we gained during the pandemic, by trying to add them to our loyalty programs with special offers, and still ensure that our digital presence remains consistent on all our platforms (Haas et al, 2020). In terms of our potential customers, we will have to reevaluate our spending mix with a marketing–return-on-investment (MROI) stimulator, so as to help us determine how to invest in marketing around social media, search applications, and other channels (Haas et al, 2020).
In terms of challenging our staff to come up with ideas and incentives, we will start by creating an incentive plan, which will serve as a program design to motivate our staff to accomplish our goals (Ciopryna, 2018). The incentive plan will include a reward that is tailored to the needs of our staff. Some of the incentives will include gift cards to spas and local services, early release from work, best parking spot for a month or more, gym membership, tuition reimbursement, bonuses, more vacation days and better benefits (401k plan etc.) (Ciopryna, 2018). We will also ensure that the most creative ideas are chosen and implemented, which will also help in making our employees feel empowered and motivated (Bienvenu, 2018). There are so many benefits to having an incentive plan, some of them include:it increases productivity, creates employee loyalty, strengthens relationships among staff, managers and business owners, and provides encouragement and gives employees something to aim for (Ciopryna, 2018).
Furthermore, some of the best approaches for compensation plan include a pay mix, where guarantee pay and at-risk pay are available (Lucid Chart, 2020). Balancing the pay mix depends on the overall objectives of the business and sales roles. Evaluating how much influence the salesperson has on the ability of the customers to buy should facilitate the pay mix to be more aggressive for individuals with higher influence roles (WorldatworkTV, 2015). Upside opportunity or leverage that pays for excellent performances depends on the aggressiveness of the sales and needs to be incorporated in the plans wittingly. Greater upside opportunity should rest on the most influential sales roles. Utmost three performance measures should govern the way of coaching and selling available on the to-do list (Brian, 2015). Depending on who is involved in the sale, a team or individual-based plan can best suit an organization’s goals.
After the restrictions are lifted now the challenge is influencing the community to embrace restaurant dining and the staff presents their ideas and incentives on how to go about it. The plan is to use customer loyalty to attain sales effectiveness. Relationship selling and customer satisfaction can contribute to attracting already established customers to the restaurant after restrictions have been partially lifted (Lucid Chart, 2020). Making customers come back and invite their friends creates strong customer loyalty. Being better in services than competitors is the key to long-term success. Understanding the dynamic of selling and asking clients how they feel about the restaurant services creates relationship selling. The strength of the customer intimacy between the staff and the customer needs to be so strong that no competitors can get between (Lucid Chart, 2020). Getting the customers willing to associate with the business by asking them about means to cut costs and improve results can reward the restaurant with customer loyalty. Caring about the satisfaction and success of the customer should be at the heart of service in the restaurant rather than the desire to make sales. Embracing consultative selling can best reposition the restaurant to help the customers alleviate their needs and achieve their objectives (Brian, 2015). Attracting, acquiring, and keeping customers is vital for the success of the restaurant after restrictions have been lifted.
Bienvenu, L. (2018, December 13). How to incentivize creativity, innovation, and out-of-the-box
thinking. Qarrot. https://www.qarrot.com//blog/how-to-incentivize-creativity-innovation-and-out-of-the-box-thinking.
Brian, T. (2015, September 30). Sales training: 3 keys to build customer loyalty. YouTube. https://www.youtube.com/watch?v=Mdh3ZM3OTpk.
Chung, D., Kim, B., & Syam, N. (2020). A Practical Approach to Sales Compensation:
What Do We Know Now? What Should We Know in the Future?
Harvard Business Review. Page 2.
Ciopryna, C. (2018, October 4). Create incentive plans to really improve employee performance.
Haas, S., Kuehl, E., Moran, J. R., & Venkataraman, K. (2020, May 19). How restaurants can
thrive in the next normal. McKinsey & Company. https://www.mckinsey.com/industries/retail/our-insights/how-restaurants-can-thrive-in-the-next-normal.
Lucid Chart. (2020, October 1). Tips for building a successful sales compensation plan.
Peter, P. J., & Donnelly, J. (2019). A Preface to Marketing Management (15th ed.).
McGraw-Hill Education.Page 153.
WorldatWorkTV. (2015, March 3). Sales compensation basics. YouTube.